New Zealand’s outstanding response to containing the COVID-19 crisis has won global praise and also retained the core strength of our economy.
This is never more evident than in the property market, where keen buyer interest continues despite the lockdown and social distancing restrictions.
Median prices were up 13.7% to the end of March, and eight regions registered record prices.
Despite the virus, confidence among buyers has remained. Property websites are saying they’ve never had more traffic from potential buyers and investors.
This buoyant buyer behaviour injects a lot of market confidence right now. But if you have some fears about what the coronavirus crisis will mean for NZ, here are some fundamental strengths working in your favour:
- The housing market was powering along before COVID-19 arrived, and the fundamentals have not changed. Our major cities are all in big demand, especially from young buyers seeking to enter the market.
- Investors are increasingly expressing interest in the property market, moving their cash from financial markets to a safer haven, or wanting a bigger bang for their buck than term deposit rates.
- The government’s new virus support package – the equivalent to 4% of GDP – will help ease the virus’s economic impact. The recent budget delivered $NZ50 billion economic package in a program called “Rebuilding Together. This will undoubtedly boost the property market.
- Our mortgage rates are low thanks to the Reserve Bank’s money-easing policy in response to the pandemic.
- Banks remain stable, which makes this crisis very different from the GFC a decade ago. While lending criteria might tighten, it will be nothing compared to 2008. Credit availability will remain strong.
- This pandemic will not last forever. So, if you’ve found your next home and you’re confident of your employment situation, this will be as good a time as any to make your move.
- If there is a small depression in prices, it will work in your favour if you are looking to buy up.
